New Leaf Ventures has entered into an amalgamation agreement with High Profile Holdings, pursuant to which New Leaf has agreed to acquire all of the issued and outstanding common shares of High Profile by way of a statutory three-cornered amalgamation.
High Profile is a retail-focused private British Columbia cannabis company, offering premium cultivated products and elevated retail presence with its store-within-a-store activations. The acquisition is expected to provide multiple operational synergies and accelerate the company’s entry into the Canadian legal market by leveraging High Profile’s top-tier genetic library, seasoned operating team and access to top-performing Canadian markets.
“This is an exciting milestone for both New Leaf and High Profile. This transaction opens the doors to established shelf space with some of the most experienced retailers in Canada. Adding to our House of Brands is one of our main areas of focus, and with the addition of High Profile we open a whole new territory to New Leaf. Their commitment to quality and consistent products with innovative strains should be well received and we are excited to launch in the coming months. We look forward to closing the transaction and continuing the Company’s strategic expansion plan,” said Mike Stier, President, CEO and Director.
Pursuant to the Amalgamation Agreement:
- New Leaf will issue 0.052548929 of a common share (each whole share, a “Common Share”) for each issued and outstanding common share of High Profile, and the common shares of High Profile will be cancelled, resulting in the issuance of approximately 10,000,000 Common Shares as total transaction consideration.
- High Profile will amalgamate with a wholly-owned subsidiary of New Leaf under the Business Corporations Act (British Columbia) and the amalgamated entity will continue as a wholly-owned subsidiary of New Leaf under the name “High Profile Holdings Cannabis Corp.”.
- The Common Shares issued to the former High Profile shareholders will be subject to a 24-month lock-up schedule, with 10% released from lock-up on closing of the Acquisition (“Closing”), 15% released six months from Closing, 20% released 12 months from Closing, 25% released 18 months from Closing and the remaining 30% released 24 months from Closing.
- Outstanding share purchase warrants of High Profile will remain outstanding on Closing and will remain exercisable to acquire Common Shares in accordance with their adjustment provisions.
- High Profile will be entitled to nominate one director for appointment to the New Leaf board of directors, subject to approval of the Canadian Securities Exchange.
Completion of the Acquisition is subject to shareholder approval for the acquisition by the shareholders of High Profile, as well as receipt of regulatory approvals and other customary closing conditions. High Profile is expected to hold a shareholder meeting to seek approval for the Acquisition in early January, 2023.